It’s probably rare for a life insurance agent to tell you not to buy life insurance, but that happened to me today relating to student loans and life insurance.
If you are in college or are a parent of a child in college that has student loans you may be looking into a life insurance policy to cover the debt in case the worst happens. It would seem that this is a responsible financial move to take, being that the last thing a grieving parent wants to think about is how are they going to pay off 10s of thousands in student loans.
Term life insurance for a college aged student who is in generally good health is very inexpensive. Despite how cheap it is there might not be a 
need for you to purchase a life insurance policy to cover the student loans. For example, today I had a 20 year old college student inquire about getting a $100,000 term policy. After discussing some options, I asked him why he needed life insurance, was he married, did he have kids? He replied that he had student loans with his parents as co-signers of the loan. After looking into his lenders specifically,we realized he had his student loans with Discover Financial which owns Citi Student Loan Corp, and they would discharge the loan in the event of death.
What this college student didn’t know,is that some student loans are discharged upon the death of the student. For example according to the Federal Government Student Aid website, Federal Direct, Federal Family Education Loan Program (FFEL) and Perkins loans would be discharged at death or permanent disability of the student.
When it comes to private loans policies of lenders vary. For example some lenders will outright discharge the debt. Others will evaluate the financial capability of the co-signer and make a decision whether to discharge the debt or not, other lenders will require co-signers to repay the loan and some don’t have a policy in place.
Private lenders like Sallie Mae, Wells Fargo, New York Higher Education Services Corp, and Discover Financial (which owns Citi Student Loan Corp) all have policies in place to discharge student loans upon the death of the student.
There have been several lenders that have received negative publicity for requiring co-signers to pay, and have discharged the debt. For example, Key Bank came under scrutiny for requiring a Rutgers student’s family to pay his loan after he died of a brain injury and reversed their decision. Recently NY Senator Chuck Schumer proposed a law that would require private lenders to discharge debt in the event of death, just like the Federal Government does.
If you have student loan debt, or are a cosigner on a loan, check with your lenders to see if they have a policy in place. If they discharge the debt, you don’t need to get a life insurance policy. If however they don’t have a policy in place or require payment, you can get an inexpensive term life insurance policy that would cover the student loan.